Deutsche Bank is set to overhaul its trading operations, in an attempt to arrest the slide of its market value and share price.
The German bank is reportedly planning to downsize its equity and interest rate derivatives businesses outside of Europe, and create a “bad bank” to hold or sell up to 50 billion euros of non-core assets, according to the Financial Times.
Indications are that US equities trading will bear the brunt of such cuts, which is not considered favourable as it remains a market of great interest for Deutsche’s European clients.
Deutsche Bank overhaul and potential mergers
Deutsche Bank has struggled for profitability since the financial crisis, with its share price declining by over 70% in the last five years.
A bank-wide overhaul has been ongoing since Christian Sewing became CEO in April 2018, with a reduction in headcount of around 7000 announced shortly after.
It was reported in March that Deutsche Bank was in discussions with Commerzbank over a potential merger, which would create a single bank with over $2 trillion in assets.
Concerns were quickly raised given the beleaguered financial position of both parties, and the talks collapsed in late April, after the parties were unable to reach a deal that provided “sufficient added value”.
Amidst rumours of talks with other suitors over a merger apparently ongoing, Deutsche showed some positive intent entering the UK mortgage market at the end of May.